PetroChina goes marching on

WILL energy giant BP come to rue the timing and execution of its stake sale in PetroChina?

Shares in China's largest oil and gas producer marched higher in Hong Kong today after it unveiled production and pricing data for last year, pushing them well north of the price that BP received on Monday.

PetroChina, in which BP held a 2% stake, said total production of oil and gas rose 2.2% last year to 890m barrels of oil equivalent. Its average oil selling price was 21% better at $27.19, in line with the global trend for firmer energy prices.

Investors reacted to the figures by pushing its stock up 2.5 cents to HK$4.025, a gain of 0.6%.

The rise put further distance between the current value and the HK$3.70 BP accepted when making its surprise exit at the start of the week.

There is no doubt BP has made a tidy sum on its PetroChina investment. It bought at HK$1.28 a share, so even at HK$3.70 it was able to walk away from the transaction about $1bn (£545m) better off. But every move beyond HK$4 must be somewhat painful for BP executives to watch.

There is also growing concern over how the deal was done. There seems little doubt that strong rumours of some major activity in PetroChina stock was doing the rounds at the end of last week.

Tongues wagged in Hong Kong that either PetroChina itself was set to place out some shares, a rumour scotched by an anonymous executive at the firm, or that one of its strategic investors was set to unload its stake. In the event, the latter happened.

As far back as last Thursday, one Hong Kong research head latched on to the basic format of the upcoming deal, handled by Goldman Sachs.

'There are rumours that either strategic investor Warren Buffett or BP may sell their stakes in PetroChina,' Mark Wan, head of research at Tanrich Financial Group, told Reuters that day. Buffett, the lauded billionaire investor, still holds his PetroChina shares.

The apparent leak had an understandable effect on the shares.

That day, as the market tried to get a handle on what was coming, they ended at HK$4.275, a drop of 3.4%. The next day, they eased further to close at HK$4.25.

Elsewhere today, Hutchison Whampoa dipped 25 cents, or 0.4%, to HK$64.50 on expectations that the telecoms-to-ports conglomerate is poised to inject its Hong Kong fixed-line unit into listed affiliate Vanda Systems Communications, a software firm.

The possible deal with Vanda, which was suspended from trade, could generate some cash for Hutchison as it aims to cover the red ink from its costly third-generation phone operations. Analysts say they expect plenty more deals from Hutch this year.

The Hang Seng index softened 7.5 points to 13,313.38, a decline of 0.1%.

Japanese consumer electronics giant Sony enjoyed another solid session amid a gathering belief that its profitability is on the mend. The shares rose 100 yen, or 2.5%, to 4180 yen.

The Nikkei 225 Average was tugged lower by weakness in chip-related shares after Intel's results in the US overnight failed to surpass expectations.

Microchip maker Tokyo Electron dropped 190 yen, or 2.3%, to 8160 as the benchmark market gauge dived 197.85 points, or 1.8%, to close at 10,665.15.